Wheelbarrows are hard to control once they have been allowed to wobble off course - so the earlier the steering starts the better. Much the same is true of economies, which can be led away from inflationary paths with much less pain if they have not already got too far down the track. Yesterday's surprise decision by the Bank of England to raise interest rates, after the highest inflation figures in a decade in December and two rises last year, respects this logic. Its effect on mortgages will make it unpopular, but it should be welcomed as the surest way to avoid even more unpleasant medicine later.

It is a sign of how smoothly monetary policy has been run recently that the unanticipated decision to raise rates by a mere quarter of a point to 5.25% has been seen as something of a shock. The Bank of England's monetary policy committee has been empowered to set interest rates since 1997, during which time the UK has notched up the longest continuous period of growth on record, avoiding the unemployment that has troubled much of Europe, and doing that with less economic volatility than has been seen in the US. It is because the 2% inflation target that Gordon Brown sets punishes undershooting as well as overshooting, the Bank cannot pursue stable prices at the expense of the real economy, but must factor in the risk of a slump.

This remit and the strength of the Bank's track record are both reasons to have confidence in yesterday's decision, but they do not explain the thinking that lies behind it. So why, when most in the City had expected the bank to pause until the statistical fog of January had cleared, did the Bank decide to act now? The simplest explanation, which the Bank stressed yesterday, is that most indicators - from mortgage debt to the money supply to high street spending - suggest that things are motoring ahead at a pace that cannot be sustained. Higher rates will discourage borrowing, bringing the economy within the speed limit.

All that is true, but when the strong pound is already making it tough to sell goods abroad, and when falling oil prices will soon curb inflation, it is not the whole story. The Bank is also thinking of its reputation, for even if current high inflation is a blip, it is possible that before it peaks it may hit 3.1% - the level at which the governor would be forced, for the first time ever, to write to the chancellor explaining himself. In this context, the shock rise usefully underlines that there is no question of going soft. That should discourage inflationary pay claims. By looking tough enough to force a recession if it has to, the Bank hopes to scare the rest of us into living within our means, so that its ultimate deterrent need never be deployed.